The Nigerian economy is at a critical juncture. A weak pre-crisis economy characterized by falling per capita income, double-digit inflation, significant governance vulnerabilities and limited buffers, is grappling with multiple shocks from the COVID-19 pandemic. Real output is projected to contract by 3.2 percent in 2020, with a weak recovery likely to keep per capita income stagnant and no higher than the 2010 level in the medium term. Policy adjustment and reforms are urgently needed to navigate this crisis and change the long-running lackluster course.
This paper provides a conceptual overview of key aspects of the design and implementation of solvency stress testing of Islamic banks. Based on existing regulatory standards and prudential practice, the paper explains how Islamic finance principles and their impact on various risk drivers affect the capital assessment of asset-oriented financial intermediation under stress. The formal specification of these risk factors helps operationalize and integrate the stress testing of Islamic banks within established frameworks for financial stability analysis.
International Monetary Fund. Monetary and Capital Markets Department
The paper reports to the Executive Board on its decision of April 29, 2019, to prepare an IMF Central Bank Transparency Code (CBT), which is linked to the 2017 Review of the Standards and Codes Initiative (RSCI), for a revision and update of the 1999 Monetary and Financial Policies Transparency Code (MFPT). Directors asked that the CBT should remove the overlap on financial policies covered by other international standards, expand the transparency standards to broader set of activities undertaken by many central banks since the 2008 financial crisis, and reorient the transparency standards to facilitate risk-based assessments to support policy effectiveness and address macroeconomic risks.
Vahram Stepanyan, Gohar Abajyan, Anta Ndoye, and Ms. Marwa Alnasaa
Small and medium-sized enterprises (SMEs) are a cornerstone of Arab economies, accounting for over 90 percent of all businesses and providing a major source of new job creation. Governments across the Arab World recognize the important role that SMEs can play in delivering higher and more inclusive growth. Many have rightly placed SME development at the center of growth and jobs strategies to meet the needs of young populations. Authorities have initiated policy interventions and schemes to support SME development. But progress so far has been patchy, and more comprehensive policy action is needed.
Fostering vibrant and competitive SMEs that contribute to employment opportunities and high value-added output requires various stakeholders to deliver on a broad range of factors. Arab governments need a holistic policy approach that addresses the gaps in access to finance, creates an enabling business environment, and upgrades human capital and infrastructure. The approach should also promote an entrepreneurial mindset.